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ammo pricing question

Discussion in 'General Gun Discussions' started by John G C 1, Jul 31, 2020.

  1. John G C 1

    John G C 1 Member

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    I know nothing about the ammo business and almost as little about business in general.

    So, let me ask.

    Are ammo producers, especially those outside the US, like Geco or S&B etc, charging more per case to US sellers right now or is the increase in prices a result of the increased buying, which simply allows sellers to price higher and still move product?

    I am just curious because, like Sgt. Schultz, I know nuuuthing.
     
  2. Megawatt maker

    Megawatt maker Member

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    Like all things in the free market...

    The price is dictated by supply and demand.

    It's not perfect, but it's better than anything else that's ever been tried.
     
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  3. Archer

    Archer Member

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    This morning, a popular large and reputable seller had a popular high quality Czech practice ammo available in 1K cases at pre-insanity pricing and with free shipping. They sold out in about 30 seconds.

    There are companies selling at normal prices, implying that their sources haven't actually jacked prices all that much if at all. Perhaps we should keep a list of the ones who are gouging right now and remember it if and when we regain some normalcy. CTD is still dead to me 12 years after their revolting behavior.

    Edited to add- the honorable seller I mention above is Midway USA. They will keep my business after this situation changes for better or more likely worse (after November as things are shaping up at the moment).

    Another company I have done business with had the same 9mm 124 grain Czech ammo for sale a few minutes ago. They were $200 more than the Midway price for the exact same item PLUS shipping- so literally double the price- and still sold out in short order.

    Needless to say I won’t darken their doorway with my business ever again.
     
    Last edited: Jul 31, 2020
  4. armedwalleye

    armedwalleye Member

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    I'm no retail expert, and no ammo marketing expert, I didn't stay at a Holiday Inn express last night either, but it seems to me there are some retailers that are selling what they have or had at normal pricing, yet some are engaging in predatory, panic pricing. Archer, above, cites one shining example, but there are others. To me, that signals it's NOT the manufacturers, nor distributors, but some unscrupulous retailers. We would do best to identify those now and avoid them like the plague when situations return to near normal.
     
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  5. BearBrimstone

    BearBrimstone Member

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    I don’t know if this is the case with ammunition but I can say that, at least with some products, charging above MSRP is grounds to be cut off from getting those items from your distributor. I know for certain that this is the case with at least video games.
     
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  6. daniel craig

    daniel craig Member

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    A lot of companies had to do a cost benefit analysis. Is it worth the cost to buy more manufacturing equipment and space to keep up with increased demand and keep prices low? Will they lose a ton of money after having bought that equipment, probably on credit, and then demand dies down, making that equipment no longer useful until demand increases again? When (not if) demand dies back down are they going to be able to recoup their losses on the equipment they bought during high demand?

    It’s not simply about demand is higher so make more. Manufacturers see increasing productivity within the limits of the setup they already have as a better solution, but that also means more money than usual has to be spent on maintenance and payroll so to make up that cost they have to charge more. International companies have it even harder because they have to pay for shipping from their country to the US on shipping companies that also have increased costs due to above reasons.


    Now suppliers have to decide, is it better to put the price at pre-panic levels and sell out of their entire inventory in a day with no idea when they’re going to get more, and have to be in a near constant state of “sold out” or is it better to increase prices so they sell at a normal rate (product sold over x amount of time) so that they always have some in stock, albeit at higher prices?

    I choose to believe that very few of the groups involved, be it manufacturers or retailers are willfully gouging prices just to eff the customer.

    Basically we’re playing ourselves. If we all just held off buying for like 6 months and creates a surplus many manufacturers could could catch up and ammo prices would be back to where we want them.


    You can only take so much ammo with you if you have to bug out, the rest is free for someone else.
     
    Last edited: Jul 31, 2020
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  7. Buzznrose

    Buzznrose Member

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    Every buyer expects businesses to NOT raise prices when market conditions warrant, but expects same businesses TO lower prices when market conditions warrant. But this may never be applied when the same buyer sells his home that they bought 20 years ago for pennies on the current market value. And YES, it’s the same basic thing.

    In a true “free market” supply and demand should dictate price....period. This benefits the most efficient market participants, and eliminates the inefficient ones.

    We had a couple really great years to buy firearms and supplies. We are in a crappy market for buyers, but ALSO FOR PRODUCERS AND SELLERS, who are having a hard time sourcing materials and product.

    If I were an ammo manufacturer or seller, I’d clearly raise my prices because I am both trying to maintain a business and responsible; to the greatest extent possible, to help my employees remain employed. If I ordered a container of ammo 6 months ago and paid “then” costs, I’d be foolish to resell for “then” prices If I am unsure of my ability to secure more product, and taking into account my new order will likely be significantly higher.

    I’m NOT saying I’d squeeze every nickel I can out of the consumer, but I am saying prices must rise to meet realities.

    COVID is causing supply chain disruptions, and Social Unrest is driving demand up. ECON 101
     
  8. John G C 1

    John G C 1 Member

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    I just really wondered about this because some places are selling a case of 9mm for say one hundred dollars less than someone else selling the same ammo but it seems like they both would be paying the same amount to get the case in.

    thanks
     
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  9. Mars5l

    Mars5l Member

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    I was at a local shop last week and the owner was talking to someone else about this. He said it's the distributors raising the prices and there aim is to get 9mm at $1 a round just so people buy less and the factories can catch up.
     
  10. CDW4ME

    CDW4ME Member

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    Current ammo supplies are being bought up, online availability is greatly reduced; increased demand + decreased supply = increased price.
     
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  11. George P

    George P Member

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    Exactly- - which is why you see gas prices increase immediately when wholesale prices increase because replacement costs are going up and they need to make more in order to cover those costs; ammo makers are no different, especially since they are dealing with commodities in a volatile market
     
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  12. Frulk

    Frulk Member

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    THERE IS NO AMMO SHORTAGE around here. You can buy any caliber on the secondary market if you’re willing to pay the CURRENT prices being asked.

    This thread will be shut down shortly but here is some current info as if this AM. I’m in the intermountain west.

    As of this AM on a popular gun related Buy/Sell internet site I saw for for the first time $750 being asked for 1K of factory brass .223 rounds. That’s the highest asking price I’ve seen to date for this caliber.

    A good friend runs a Sportsmans Warehouse in the area. I texted him this AM and asked what his Ammo and reloading components situation currently was. He responded “dismal”.

    It is what it is....
     
    Last edited: Jul 31, 2020
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  13. Archer

    Archer Member

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    The fact that a few “old line” mail order companies are selling at normal rates (~20-21 cents/round for brass case 124 9mm from reputable makers) tends to indicate that wholesale pricing hasn’t spiked by 100-120%, which is the markup over and above normal margins being taken by many other sellers at the moment. I’m not particularly in a position to need more of this stuff, as I have a good supply obtained well before the current madness. It’s the people who have decided to join our community more recently, and are faced with the prospect of paying $550 or more for a case of $200 ammo that I feel sympathy for.
     
  14. BreechFace

    BreechFace Member

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    What are gun stores supposed to sell when they clear out their shelves of ammo at pre-panic prices? Supply and demand as @Buzznrose explained well. If I were a gun store and saw what was happening I would mark up my goods as well, as there is a supply drought that I will be faced with where I call up my distributor to request more product (ammo) and get a chuckle on the other end; followed by a "I'll send you tracking information in 6 months when we get some in."

    I guess when the store shelves are empty with no restock in sight a gun store can always place these on the shelves and see how they sell. Tough to keep the lights on and the employees paid for what amounts to a "gun-owners gentleman's club," with no product to sell.
    Canned%20Air%20from%20SLC.jpg
     
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  15. Mr. Zorg

    Mr. Zorg Member

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    For anything imported (and exported) by sea, there's an extra cost that started this year on additional refining required to produce marine fuel oil with lower sulfur content for ships to burn, or to require exhaust gas scrubber equipment on ships burning the same fuel oil specs in force last year. This is a global, not national, set of requirements from the IMO with auditing and policing. Those heavier fuels are starting to be required to follow the trend that's been going on for 15+ years for gasoline and diesel in the US.

    That said, in addition to MidwayUSA I noticed in PPU 7mm-08 rifle ammunition anyway, Target Sports kept the same price as before the pandemic pandemonium of $13.99 / box of 20. Those two firms get my repeat business.
     
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  16. BreechFace

    BreechFace Member

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    There isn't a shortage/panic buying of 7mm-08 though, that is the key point. Supply and demand for 7mm-08 I bet is unchanged.
     
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  17. BearBrimstone

    BearBrimstone Member

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    I have nothing against the small stores that are afraid of having nothing to sell later on due to distributors playing favorites with large stores, but if stores like Cabelas can still charge $9-$11 a box for 9mm when they have it in stock that proves that they aren’t paying more for the ammunition from distributors. Instead, the stores are the ones banking all of the extra profits be that insurance for later lack of stock or mere greed I don’t know. I am glad I had enough put away that I can wait until this is all over without changing how often I shoot. The only thing that has really gotten on my nerves is how seemingly every few days sgammo decides to stop sales smaller than cases. Raise the prices a few bucks if need be but quit trying to make me buy 10 boxes when I only want 3.
     
  18. Old Dog

    Old Dog Member

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    I dunno, I just ordered some more 50-round boxes of Federal HST 124-gr +Ps from SGAmmo and didn't need to buy a case. Although if I'm buying range fodder, I prefer to buy in 1000-round lots.

    Swept through my local Wal-Mart today (needed a toner cartridge for my computer printer) and there was plenty of .30-30, .30-06, .243, .270, 7mm mag, etc. Even a bunch of CCI .22 LR Mini-Mags and Stingers ... Oh, and my local Bi-Mart had plenty of .40 S&W for those needing pistol ammo ...

    No, it's the distributors here.

    And you guys do know that the lead and copper mines were affected when the virus first hit, right? Many either ceased production or drastically reduced production for a couple months. The ammo manufacturers stepped up (once they were allowed to re-open and got employees back) but the couple of months were sourcing raw materials was a concern didn't help output.
     
  19. Mr. Zorg

    Mr. Zorg Member

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    Try to find it in stock at any Academy Sports and Outdoors then tell me all about how there isn't panic buying of 7mm-08. I've already been there & done that, leading to me to put in a notification request at Target Sports when it was back in stock again. That also told me that transoceanic shipping of ammunition had resumed.

    https://www.academy.com/shop/browse...re-rifle?facet=ads_f10506_ntk_cs:"7mm-08+Rem"

    It's online only now for availability and has been for some time, with a huge reduction in available selection vs 6 months ago.

    Is it at the same level of handgun ammunition? No, and I never indicated that. But that doesn't mean it doesn't exist and hasn't been going on for some time now. The result is continuing empty retail in-store shelves, been that way for a while. And not just 7mm-08. You can see for yourself via Academy's web site.

    What were the stakes of your bet?
     
    Last edited: Aug 1, 2020
  20. Ks5shooter
    • Contributing Member

    Ks5shooter Contributing Member

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    Also there are many noobs to the gun world. Gun purchases are at an all time high. My last NICS check took 4 days to get processed. That being said all these new gun owners need to feed their new toys. So yes demand is incredibly high and prices reflect this. Covid,rioting,looting and an election year have made a perfect storm for gun and ammo panic buying.
     
  21. jeff-10

    jeff-10 Member

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    Local gun shops are often full of factual, completely logical and rumor free information.
     
  22. hso

    hso Moderator Staff Member

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    Consider that like all manufacturing and distribution right now is negatively impacted by the current COVID-19, ammunition manufacturers are limited. Add demand, lower supply, more difficult distribution and you have the perfect storm for panic buying, empty shelves, and high prices.
     
  23. BreechFace

    BreechFace Member

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    When I can go on AmmoSeek and find a laundry list of stores selling 7mm08 at prices down to $0.64 / round, I don’t consider that tight supply.

    Now the commonly stockpiled rounds such as 5.56, 9mm, 7.62x39, etc stores supplies have all been diminished and what is left is 50-100% increase in price. Right now on ammoseek which is an aggregator for Ammo, the cheapest 5.56 is $0.50 / round which one could find for $0.30 / round before this demand hit.

    I have yet to see that happen to hunting rounds such as 7mm-08. If common caliber hunting rounds saw the same increase as 9mm, 5.55, etc. they would be nearly $2.00 / round.

    I guess I just don’t see your comment on supply and cost of 7mm08 being much of any out of line of normal prices. But anyways, I leave it at that, just trying to provide perspective to others as to that this is a specific caliber demand spike and not across the board to all calibers.
     
  24. Prince Yamato

    Prince Yamato Member

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    Most distributors (companies dealers buy from) keep costs relatively the same. It is then up to the dealer, what they want to charge. If you see a price that fluctuates more than a couple dollars, the dealer is the one doing the massive markup.

    To add: whenever we complain about dealer’s high prices, the canned response is “that’s capitalism!” or “do you want the small shops to go out of business?”

    I’d say, if the only way you can stay in business is to sell Wolf Steel case 9mm at $30/50, that sounds like a you problem, not a me problem and your business model is not a good one. If you’re forced to close... hey, “that’s capitalism!”
     
    Last edited: Aug 1, 2020
  25. hso

    hso Moderator Staff Member

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    That is correct during normal times...these aren't. Right now manufacturers aren't producing as much as they did before March and since March demand has gone up. Add that distributors aren't fully staffed, shipping companies aren't fully staffed and retailers are now seeing a higher demand than you'd expect.
     
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